Gini’s transvariation analysis: an application on financial crises in developing countries

The damage and the recurrence of financial crises have increased the concern of investors and policymakers on one hand and the interest of macroeconomists on the other. This paper presents an original non parametric methodology, whose aim is to give a very intuitive and rigorous method for variable selection in order to analyse financial crises. Transvariation analysis compares the distributions of two different groups of countries (sound and distressed) with respect to a single macroeconomic variable and selects the indicators on the basis of a low transvariation probability index. The current account deficit to GDP ratio, differently from other studies on financial crises, seems to be a suitable variable in discriminating distressed countries from sound ones, and the case of Argentina and Turkey confirms this finding.     

Are firms from developed markets more international than firms from emerging markets?

Regionalist supporters’ claim that most of the world's largest firms are regional rather than global and that managers should be encouraged to ‘think regional, act local and forget global’ (Rugman and Moore, 2004, p. 67). We apply the matrix of multinationality proposed by Aggarwal et al. (2011) to a sample of the world's 500 largest corporations, the Fortune Global 500. We show that these firms range from purely domestic to regional, trans-regional and entirely global with most lying in the trans-regional and global categories. Our results imply that global strategies are essential to international trade and management in today's business environment. We compare multinationality results by market type (developed versus emerging market), industry, size and age. We find that firms from more advanced economies tend to be older, larger and more multinational than firms from emerging markets. We find no relationship between multinationality and age or multinationality and size, and conclude that developed market firms are not more multinational as a result of size, age or industrial structure.     

Design-based distribution function estimation for stigmatized populations

In this paper, we discuss in a general framework the design-based estimation of population parameters when sensitive data are collected by randomized response techniques. We show in close detail the procedure for estimating the distribution function of a sensitive quantitative variable and how to estimate simultaneously the population prevalence of individuals bearing a stigmatizing attribute and the distribution function for the members belonging to the hidden group. The randomized response devices by Greenberg et al. (J Am Stat Assoc 66:243–250, 1971), Franklin (Commun Stat Theory Methods 18:489–505, 1989), and Singh et al. (Aust NZ J Stat 40:291–297 1998) are here considered as data-gathering tools.     

Identitarian passions: the overwhelming power of the human recognition need

According to Plato, thymòs—a notion denoting the human need for recognition—triggers off the most powerful and overwhelming human passions. Indeed, any action originated and nurtured by thymòtic passions places its own raison d’être in itself. The acts motivated by thymòs can either improve or (even) worsen someone’s wellness: they do not entail any pay-off in the present or future, and their nature is not influenced nor mitigated by monetary incentives. Moreover, it follows that since identity is based on the others’ recognition (both individuals and social groups), then indulging with thymòtic passions and building up someone’s own identity are exactly the same process. Indeed, thymòtic passions are identitarian passions. This paper argues the relevance of the thymòtic approach. We do propose a conceptual framework that we reckon is useful and innovative in order to study and interpret these peculiar forms of human action. We also point out the social and “environmental” conditions that stimulate their appearance.     

Economic issues in tariffication: an overview

The agricultural trade liberalization proposal known as ‘ tariffication’ aims at converting all existing non-tariff barriers (NTBs) to trade into bound tariffs, and to reduce these tariffs over time. This is in tune with the original philosophy of the General Agreement on Tariffs and Trade (GATT) and it calls for a dramatic overhaul of existing agricultural policies in many developed countries. The main economic issues that arise with tariffication stem from the non-equivalence of tariffs and NTBs in a number of scenarios. This paper analyzes non-equivalence arising from the existence of: imperfect competition in importing countries; price instability in importing and exporting countries; and, inefficient allocation of quantitative restrictions. It is shown that in all these cases the definition of an appropriate 'equivalent tariff to be used in tariffication is not straightforward, and that in general this equivalent tariff cannot be computed on the basis of only observed price differences between countries. Tariff-rate quotas, which are meant to be the main tool of implementation of tariffication according to the existing proposal, are analyzed in some detail. Concerning the relationship between tariffication and the other elements of the trade liberalization package, it is shown that tariffication would limit the scope of export subsidy policies. It is also shown that the existence of production and export subsidies makes observed price gaps between countries of questionable value in setting equivalent tariff levels. Finally, it is argued that the main focus of tariffication should be the conversion of NTBs to acceptable long-run (bound) tariffs rates, and considerable flexibility in this conversion process could be exercised in the transition period.     

The Cost Structure of Ontario Dairy Farms: A Microeconometric Analysis

The cost structure of Ontario dairy farms is studied through a multiproduct hybrid-translog cost function, extended to include farm-specific structural characteristics and estimated using farm-level data. The regularity conditions of monotonicity in output quantities and input prices and concavity in input prices are satisfied at the median point. Parametric tests show that input-output separability is rejected while nonjointness is not, and seven out of twelve farm-specific characteristics significantly affect costs. Derived input demands are inelastic to own-price changes, and all inputs are net substitutes. Evidence is provided on the existence of increasing long-run returns to scale for a wide range of output levels. The results of the estimated cost function substantiate the claim of economic rents deriving from the milk pricing system. La structure des coûts des producteurs laitiers en Ontario est etudiée au moyen ?une fonction de coûts hybride-translog qui inclue plusieurs produits. La fonction de coûts est étendue de manière à inclure des caracteristiques structurelles de ferme, et est estimée à partir de données de ferme. Les conditions régulieres de monotonicité au niveau de la production et du prix des intrants, et de concavité au prix des intrants, sont satisfaites à la médiane. Des tests paramétriques montrent que la séparabilité intrant-extrant est rejectée tandis que la non association ne ?est pas. Sept des douze caractéristiques de ferme affectent les coûts de façon significative. Les demandes derivées ?intrants sont inélastiques par rapport au changement de leur propre prix et tous les intrants sont des substituts nets. On a prouvé ?existence ?économie ?échelle croissante à long terme pour une grande variété de niveaux de production. Les résultats obtenus supportent ?idée que le systeme de prix dans ?industrie laitière permet des rentes économiques.     

Vertical Product Differentiation, Entry-Deterrence Strategies, and Entry Qualities

We analyze the potential entry of a new product into a vertically differentiated market. Here the entry-deterrence strategies of the incumbent firm rely on “limit qualities.” The model assumes quality-dependent marginal production costs and considers sequential quality choices by an incumbent and an entrant. Entry-quality decisions and the entry-deterrence strategies are related to the fixed cost necessary for entry and to the degree of consumers’ taste for quality. We detail the conditions under which the incumbent increases its quality level to deter entry. Quality-dependent marginal production costs in the model entail the possibility of inferior-quality entry as well. Welfare is not necessarily improved when entry is encouraged rather than deterred.